Valero to Store Gasoline, Diesel in Mexico

In October 2023, Valero will begin to store gasoline and diesel at a terminal located in Altamira, Tamaulipas, constructed by OTM. The terminal boasts a storage capacity of 1.1MMb of gasoline, diesel and Methyl tert-butyl ether (MTBE) additives. Valero has invested US$120 million in the project. Two bays were installed at the facility to load pipes and transport 25Mb/d. The operational tests are set to begin with the arrival of a fuel tanker in September, as stated by Carlos García, Director General, Valero Mexico.

Valero projects that it will conclude 2023 with a storage capacity of 5MMb spread across terminals located in Mexico City, Veracruz, Puebla and Tamaulipas. Additionally, it has plans to develop projects in Nuevo Leon and Jalisco. García said Valero already operates 220 gas stations in 17 states throughout the country.

Valero, along with ExxonMobil, Koch, Marathon and Shell, are the main primary private importers of gasoline and diesel in Mexico. Valero has established storage capacity agreements with infrastructure companies such as NuStar, Sempra and Grupo México. Private companies imported 218Mb/d of gasoline and diesel, while PEMEX acquired 754Mb/d of both fuels abroad in February 2022.

Mexico's dependence on the US for its gasoline and diesel imports has long been a cause for concern. The country's refining capacity is limited, and its refineries are aging and operating below capacity due to underinvestment and maintenance issues. As a result, Mexico must import a significant portion of its refined petroleum products to meet its domestic demand, making it vulnerable to supply disruptions, price fluctuations and geopolitical tensions that could impact the US-Mexico relationship.

To address this issue, the Mexican government has allocated significant funds to refurbish and improve the National Refining System (SNR) to achieve energy self-sufficiency. The rehabilitation program launched for the six refineries in 2019 includes cleaning, repairs and normal maintenance and operations, with a focus on the Minatitlan and Tula refineries. The program does not include the Olmeca refinery, which has been reported to cost at least US$14 billion.

Despite López Obrador’s refining strategy, PEMEX reported losses from refining in 2022, the state company still depends on exports to meet the national fuel demand. Mexico's efforts to achieve energy self-sufficiency and reduce its dependence on the US for gasoline and diesel imports will need to be carefully balanced with economic considerations and a realistic appraisal of the challenges ahead. Moreover, the government’s current energy policy has generated tensions with Mexico’s free-trade partners, Canada and the US, due to favoritism to state companies over private ones undermining the latter’s operations.